Month: January 2021

The prices of premium marijuana flower in Colorado continue to climb higher and higher during the COVID-19 pandemic. What could steadily rising prices for high-quality marijuana flower mean for the cannabis industry in Colorado in 2021 and beyond? Keep reading this blog to find out.

Wholesale Prices of Marijuana Flower in Colorado Set Records

Wholesale prices for marijuana flower in Colorado are currently at their highest point in nearly five (5) years. The Colorado Department of Revenue, which maintains records on legal cannabis sales in the state, recently reported that the Colorado wholesale market price for one pound of marijuana flower has reached $1,721. According to government agency records, the last time the price eclipsed $1,700 was in July 2016. Moreover, this represents a major reversal of fortune for the marijuana flower market: just two years ago, wholesale flower prices barely hit $700 per pound.

The price of marijuana flower on the wholesale market steadily increased since the beginning of 2020 – and then saw a massive spike in the last quarter of 2020. According to data provided by state-licensed cannabis operators, wholesale flower prices in Colorado went up by more than 30% between October 2020 and January 2021.

The higher prices for marijuana flower are likely an important factor in the continued explosion of cannabis sales in Colorado. Colorado cannabis operators seemed to set a new record for dispensary sales every month in 2020. For the entire year, total sales of recreational marijuana and medical marijuana in Colorado totaled more than $2 billion.

Strong Demand for Expensive Cannabis Flower Brands Amid COVID-19 Pandemic

Marijuana retail businesses have also noticed that there is a particularly strong demand by consumers for some of the more expensive cannabis flower sold by top-tier cannabis brands. Marijuana flower sold by premium brands are in high demand right now because the demand for cannabis generally has increased during the coronavirus pandemic.

At the beginning of the COVID-19 pandemic, cannabis consumers tended to stockpile cheaper cannabis flower products because they were worried about possible lockdowns and the closing of dispensaries. (Dispensaries in Colorado and elsewhere were actually able to remain open during the pandemic because states classified the dispensaries as “essential businesses.”) What ended up happening, however, is that cannabis consumers gravitated toward the more expensive, artisanal cannabis that remained on shelves after budget flower products were gone. This led to consumers appreciating the more potent marijuana products, including premium flower brands.

Consumers Paying More for Popular Marijuana Flower Brands

While greater demand and higher prices for marijuana flower is certainly good news for marijuana cultivators, some cannabis manufacturers and retailers have been forced to adjust their sales prices to account for increased costs. Ultimately, those additional costs are passed on to cannabis consumers who don’t seem to mind as the cannabis industry targets a new, more refined demographic. These days, individuals who head to their local dispensary to purchase cannabis flower tend to seek out high-quality, small-batch flower produced by premium brands like Cookies, Kaviar, and Snaxland.

Greater consumer demand for more expensive cannabis flower has prompted cannabis businesses to set higher prices. While the average wholesale price for cannabis flower in Colorado is around $1,700 per pound, some brands price their high-grade flower product at more than $4,000 per pound. The expectation among many in the cannabis industry is that demand for premium marijuana flower will not subside even after the COVID-19 pandemic is over.

New Business Strategies for Colorado Cannabis Operators During Coronavirus

Some cannabis businesses operating in Colorado are employing new strategies to try to take advantage of the increased demand for premium marijuana flower. For example, dispensaries are collaborating with branded flower companies on new product launches to put a spotlight on higher-end marijuana flower products. Additionally, premium flower brands are taking advantage of high numbers of followers on social media platforms like Twitter, Facebook, and Instagram to create buzz around new products. Beyond that, the limited supply of certain small-batch flower makes them even more desirable to consumers who don’t want to miss out.

One premium flower cultivator in Colorado that has seen a surge in sales during the pandemic is Kaya Cannabis, a cannabis company that utilizes in-house experts to cultivate unique strains of marijuana flower and other products in small batches. The Colorado-based craft growing cannabis company currently operates dispensaries located on South Fox Street in Denver, West Colfax in Denver, and West Jewell Avenue in Lakewood. All three marijuana retail stores provide customers with a wide variety of cannabis products, including premium flower brands like Kaviar and the Kaya Cannabis in-house brand. The Kaya Cannabis Santa Fe Dispensary on South Fox Street is also used as a cannabis cultivation facility.

Colorado’s Local Marijuana Market Thriving as Cannabis Industry Gains Legitimacy

Colorado’s tourism industry is struggling during the coronavirus pandemic as most people choose not to travel across state lines and risk their health. This means that the booming cannabis economy in Colorado is driven almost entirely by local residents in towns like Denver, Aurora, and Fort Collins. What residents have realized during COVID-19 is that their disposable income may be better spent on cannabis than on trips to restaurants, concerts, or movie theaters – especially if the plan for the foreseeable future is to remain indoors and at home.

The Colorado cannabis market has also thrived as marijuana becomes more accepted and is seen as a “legitimate” industry. In the recent 2020 election, voters in five states approved ballot measures to legalize marijuana for either recreational use or medical use. With several more states appearing primed to legalize adult-use cannabis in the next few years, it seems likely that cannabis will gain even more legitimacy.

Contact Scythian Cannabis Real Estate

Scythian Real Estate is a privately held cannabis real estate fund that partners with sophisticated cannabis operators in Colorado and throughout the U.S. Scythian recently partnered with Kaya Cannabis on a sale-leaseback deal for the cannabis operator’s 1075 South Fox Street dispensary in Denver, CO. If you are a cannabis operator looking to unlock real estate equity and propel company growth, email Scythian today.

PLEASE NOTE THAT THIS BLOG IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN SCYTHIAN REAL ESTATE FUND.

The cannabis business continues to be very good for Columbia Care. The company behind many of the cannabis industry’s leading dispensaries recently reported its financial and operating results for the third quarter – and the numbers are staggering. Columbia Care posted all-time highs for a single quarter in terms of revenues and profits generated from the cultivation, manufacturing, and sale of medical cannabis and adult-use cannabis. What does this mean for Columbia Care and the rest of the cannabis industry going forward? Continue reading this blog to learn more.

Columbia Care’s Cannabis Revenues Are on the Rise

Columbia Care began as a leading provider of medical cannabis in the United States, and the company is now one of the country’s largest cannabis cultivators, manufacturers, and retail providers of both medical cannabis and recreational cannabis. Columbia Care currently operates 100 different facilities, including 76 dispensaries in numerous cannabis markets.

“Our growth strategy and operational discipline resulted in Columbia Care generating another quarter of record results.”

-Nicholas Vita, Columbia Care CEO

Columbia Care generated combined revenues of nearly $180 million during Q3 2020. This resulted in a gross profit of nearly $70 million and an adjusted EBITDA of $2.4 million. These third quarter results for Columbia Care included just one month of revenues from The Green Solution (TGS), which was officially acquired on September 1. During the month that followed, TGS generated more than $9 million in revenues and more than $4 million in gross profit.

Columbia Care Acquires The Green Solution in Colorado

In addition to the strong financial results, another reason for optimism regarding Columbia’s Care continued growth is the recent acquisition of The Green Solution (TGS). Nicholas Vita, the CEO of Columbia Care, noted that the acquisition of TGS will help to solidify the parent company’s leadership position in the Colorado cannabis market. Vita added that the TGS acquisition strengthens Columbia Care’s national portfolio of cannabis brands and will provide experience and expertise as the company looks to expand into new state markets where adult-use and/or medical cannabis is either already legal or on the cusp of becoming legal.

Columbia Care Dispensaries Are Located in Top Cannabis Markets

Columbia Care has dispensaries all over the United States. Some of the key cannabis markets where Columbia Care operates dispensaries include:

• Colorado: Columbia Care revenues and gross profit in Colorado were both up 19% in Q3 when compared to Q2. These positive trends were due in large part to the acquisition of The Green Solution, the largest vertically integrated cannabis operator in the state. Columbia Care also operates a low-cost cannabis cultivation facility in Trinidad, CO.
• Illinois: Columbia Care operates a Canopy in Aurora cultivation facility and saw record revenues for cannabis flower production and cannabis flower wholesale revenues in Illinois during Q3. Columbia Care also opened an adult-use dispensary in Villa Park in September.
• New York: Columbia Care revenues in NY went up almost 25% from Q2 to Q3. This increase in cannabis revenues was fueled by the introduction of more efficient marijuana cultivation and manufacturing formats.
• Pennsylvania: Columbia Care’s Q3 revenues in Pennsylvania were up roughly 20% when compared to Q2 revenues. The surge in demand is expected to continue, prompting Columbia Care to continue pursuing expansion throughout the state.

What Does the Future Hold for Columbia Care and the U.S. Cannabis Market?

The future looks bright for Columbia Care and the United States cannabis industry in general. Columbia Care’s Q3 2020 financials showed significant growth, with a 78% increase in company profits when compared to the second quarter of 2020 and a 300% increase in profits over the third quarter of 2019. These trends are expected to continue in Q4 and into 2021.

Columbia Care expects to increase its position in California over the next year as a result of the company’s recent acquisition of Project Cannabis. Columbia Care is also expected to expand its already-strong portfolio of cannabis products with Seed & Strain, the company’s first cannabis lifestyle brand developed entirely in-house.

Contact Scythian Today for Information on Cannabis Real Estate in Colorado and Across the U.S.

Columbia Care’s acquisition of The Green Solution (TGS) was also good news for Scythian Real Estate. Scythian is a privately held fund that owns more than a dozen cannabis properties leased by TGS and operated as dispensaries. These dispensaries are located throughout Colorado, including Denver, Aurora, Fort Collins, and Black Hawk. The Green Solution is just one of the major U.S. cannabis operators that Scythian has partnered with.

To learn more about the Scythian Real Estate Fund, send us an email.

PLEASE NOTE THAT THIS BLOG IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN SCYTHIAN REAL ESTATE FUND.

Third quarter revenues for major cannabis operator Curaleaf totaled $182.4 million, representing a new all-time record for earnings by the company in a single quarter. Additionally, the future for Curaleaf looks even brighter after the cannabis company completed its acquisition of competitor Grassroots Cannabis.

Curaleaf Revenues on the Rise in 2020

Curaleaf has seen its revenues and profits trending upward in 2020. Curaleaf’s Q3 revenues, which officially ended on September 30, increased by approximately 55% over the cannabis company’s Q2 revenues, and increased by a remarkable figure of 195% year over year when compared to Q2 in 2019. Those numbers come directly from Curaleaf’s financial and operating results, which were recently released by the company.

Curaleaf’s pro forma revenue in the third quarter of 2020 was $215.3 million. This was a record high for the cannabis operator. “Pro forma revenue” refers to the company’s managed revenue plus revenue from businesses that Curaleaf acquired. Curaleaf’s pro forma revenue for the third quarter includes revenue from the company’s recent acquisitions of Arrow Alternative Care and Grassroots Cannabis, which were both completed during Q2.

Curaleaf’s managed revenue in the third quarter was $193.2 million. “Managed revenue” is defined as total company revenue, as well as revenues from businesses that Curaleaf manages. The company saw a strong increase in managed revenue of 59% over the second quarter in 2020 and 164% over the third quarter in 2019. Mike Carlotti, Curaleaf’s Chief Financial Officer, said that the company anticipates “a continued rise in managed revenue” in the fourth quarter and in 2021 as Curaleaf completes its acquisition of Alternative Therapies Group in Massachusetts.

Curaleaf’s adjusted EBITDA in the third quarter was also a record high for the company: $42.3 million. Adjusted EBITDA includes earnings before interest, taxes, depreciation, and amortization. According to Curaleaf financial data, adjusted EBITDA in Q3 2020 was up 51% over Q2 2020, and a whopping 305% year-over-year increase when compared to Q3 2019.

Cannabis Sales and Profits Increase as Curaleaf Expands into New Markets

Gross profits for Curaleaf from retail cannabis sales in Q3 2020 were almost $90 million. This was a 110% increase over Q2 2020, and a massive 280% increase over gross profits from cannabis sales in Q3 2019. The surge in retail revenue was driven largely by the company’s continued growth and expansion, which included multiple new dispensary openings in Florida. Curaleaf also launched the Select brand in Illinois, Ohio, and Pennsylvania.

The strong sales revenues for Curaleaf came as the cannabis business scaled and operated dispensaries across 17 states. Moreover, Curaleaf continues to scale with an eye toward future growth, as the company recently expanded its marijuana retail sales presence to 23 states thanks to the acquisition of Grassroots Cannabis.

In addition to acquiring several major cannabis brands and companies, Curaleaf also continued to improve the operating capacity and efficiency of its own existing cannabis cultivation and processing facilities.

Curaleaf Thrives Despite Coronavirus Impact on Cannabis Market

The surge in profits for Curaleaf came even as the company was affected by the coronavirus pandemic, much like other businesses that depend on retail sales. Curaleaf sustained an estimated adverse impact of $25.6 million due to temporary store closures caused by the COVID-19 pandemic, as well as restrictions placed on retail businesses in states like Massachusetts and Nevada where Curaleaf has a significant presence.

Some of the third quarter highlights for Curaleaf included:

• Launched the Select brand in three (3) new states. Select is a popular cannabis concentrate brand with a dominant footprint in numerous state and regional markets.
• Completed merger with Grassroots Cannabis. This acquisition has the immediate effect of making Curaleaf the largest cannabis company in the world in terms of both revenue and operating presence. The merger with Grassroots also allowed Curaleaf to expand their presence into six (6) new states, including flourishing cannabis markets in Illinois and Pennsylvania.
• Completed acquisition of Maine Organic Therapy assets. Curaleaf was already managing these assets, but now the merger of the two companies has been finalized and Maine Organic Therapy has been officially integrated into Curaleaf. Curaleaf has converted and consolidated nearly all of the company’s managed entities, and Curaleaf expects to consolidate the rest of its managed entities in the fourth quarter of 2020.

Curaleaf Sale-Leaseback Deals Provide Additional Cash Flow

According to a press release issued by Curaleaf, the company generated significant cash flow from operations in the third quarter of 2020. Curaleaf reportedly has access to around $85 million in cash.

Curaleaf has continued to complete sale-leaseback deals. These types of transactions allow cannabis operators like Curaleaf to immediately improve their cash flow. For example, Curaleaf was able to raise around $41 million in net proceeds from sale-leaseback transactions in the third quarter of 2020.

The Future Looks Bright for Curaleaf

Curaleaf is the largest vertically integrated multi-state cannabis operator in the United States, with cannabis cultivation sites, cannabis processing facilities, recreational marijuana dispensaries, and medical marijuana dispensaries fully operational in 23 states. Curaleaf is a cannabis industry leader with a strong reputation for providing high-quality products and offering manufacturing and cultivation expertise. Additionally, Curaleaf’s top-selling cannabis products include both the main Curaleaf brand and the Select brand.

Curaleaf CEO Joseph Lusardi is extremely optimistic about the company’s future prospects. According to Lusardi, “Curaleaf remains incredibly well-positioned following the transformative legalization of adult-use cannabis in Arizona and New Jersey, and consequently the potential of future adult-use in New York, Pennsylvania, and Connecticut.” Lusardi pointed to several different types of transactions that Curaleaf expects to complete in the months ahead, including organic initiatives and integration of the Select brand into Curaleaf products.

Contact Scythian Cannabis Real Estate

Scythian Real Estate is a full-service real estate partner of large cannabis operators who need access to capital. Scythian has partnered with Curaleaf, through Grassroots Cannabis, to provide access to capital via the Scythian real estate investment fund.

For more information about how you can partner with Scythian, send an email today.

PLEASE NOTE THAT THIS BLOG IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN SCYTHIAN REAL ESTATE FUND.